8/02/2005

The US Supreme Court's June 23, 2005 decision in Kelo et. al. v City of New London, Connecticut has put a burr under the saddle of legislators from Washington, D.C. to California.

Kelo v New London upheld the right of that Connecticut city to take, under the right of eminent domain, property in its Fort Trumbull neighborhood to enable construction of a large development containing a hotel and conference center, private residences, shopping and restaurants, a marina, offices and research facilities. The project is ancillary to an otherwise unrelated research park recently constructed for Pfizer Pharmaceuticals. The "condemned" area was largely residential and in no way blighted or crime ridden, conditions which, under a much earlier Supreme Court decision, was ruled as justification for taking property to further develop or improve for the public good.

A number of property owners fought the taking of their properties and, assisted by a non-profit legal center The Institute of Justice, brought suit against the city, ultimately arriving last winter before the Supreme Court.

The Court, in a 5-4 decision, largely deferred to the City of New London's judgment that the proposed development on the seized land would provide appreciable benefits to the community and thus "serve a public purpose...and ...satisfy(s) the public use requirements of the Fifth Amendment."

Flash forward almost exactly one month.

Most Supreme Court decisions go unnoticed. The exceptions, and we all know what they are, can rankle in the body politic for years. Kelo v New London ignited an instant firestorm. Talk show hosts, most of whom had obviously not read the decision, were all over it. A spokesman for Pfizer felt it necessary to call in to one weekend CNN program to (rightly) protest that his company had nothing to do with the proposed development; it was New London itself which was trying to build on Pfizer's presence. In any case, both federal and state lawmakers have hastened to draft bills to provide immediate relief.

In the last 30 days, at least five resolutions have been filed in the U.S. Congress either decrying the Supreme Court eminent domain decision or proposing legislation to reign in the government's eminent domain powers on all levels. House Resolution 3135, sponsored by several dozen members, seeks to prohibit any state or political subdivision of a state from using "economic development" as a reason for exercising eminent domain if federal funds would contribute in any way to the project or the exercise of that (eminent domain) power over the project, and likewise prohibits such "abuse" by the Federal Government.

The Institute for Justice, which funded the Fort Trumbull residents' court battle, has filed a petition with the Supreme Court on behalf of these petitioners asking the Court to reconsider its June decision and stating that it has "already opened up the floodgates to eminent domain abuse." According to the Institute, 25 states are moving toward limiting the authority of state government to so broadly exercise eminent domain procedures.

We cannot verify the number 25, but it is certainly a hot button issue. Missouri Governor Matt Blunt has appointed a task force to review his state's eminent domain laws and draft legislation that would establish criteria for Missouri state and local government to follow when they contemplate the taking of public property.

House Bill 4091 has been introduced in Illinois and the Illinois Association of Realtors is advocating for changes that would clearly define terms in the bill for "public use;" and add a prohibition on eminent domain when any of the property to be seized would ultimately be owned, leased to, sold, or developed by a private party unless endorsed by a 3/5 vote of both chambers of the Illinois General Assembly. The Realtors also want each parcel in a project considered as separate from the project as a whole.

California and Virginia are considering both legislation and constitutional amendments to limit their states' power to seize property. Among the features of the California legislation is one requiring that property must be sold back to its prior owners if it is not used for the reason for which it was acquired. One of the California sponsors, State Senator Tom McClintock, stated "There are 6,000 public agencies in California that now have the power to seize your home, pay you pennies on the dollar for it, and then give it to somebody else for their own personal gain and profit."

In Alabama, Governor Bob Riley's office announced this week that it is preparing legislation that would prohibit cities and counties from using eminent domain to take property for commercial, retail, office, or residential development. The legislation would still allow for tradition projects such as public roads and schools.

New York property owners, under proposed legislation would have 90 days to protest condemnation proceedings. Furthermore, displaced residents would have to be paid 150 percent of the market value of their property.

Both Tennessee and Iowa are also considering legislation to limit condemnation of private property.

However, not all of these bills are destined for success, at least not in the short term. In Texas anti-eminent domain legislation has already been deemed dead on arrival because the House refused to negotiate a final bill with the Senate, largely over a provision that would have required state and local governments to pay replacement costs for property rather than pay fair market value.

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